Leicester hospitals warn of £1m emergency shortfall

The University Hospitals of Leicester NHS Trust said it had seen a 7% rise in admissions compared with last year.

But a Department of Health funding formula means it will only pay 30% of the cost of some of the extra patients.

The trust said it expected high demand to continue into 2013 and the shortfall would add to the "considerable financial strain" on hospital services.

Patients who need to be seen, need to be seen. So they (the hospital) are in a catch 22 situation, they cannot winZuffar Haq, Health campaigner

Extra challenges

The Department of Health uses a system called Payment by Results (PbR) to fund some NHS services.

This sets national tariffs on costs for each patient but also imposes a benchmark on numbers which can be treated annually.

The last benchmark for Leicester was set in 2008 at 63,804 but the University Hospitals of Leicester NHS Trust (UHL) is set to pass this and therefore receive the reduced payments.

Andrew Seddon, Director of Finance at UHL, said: "That puts a considerable financial strain on top of the challenges of delivering the extra activity and doing that work safely.

"We need to estimate for the full year - which for us runs until the end of March next year - we need to estimate how much we think we are going to be over that threshold.

"Based on our current estimates we reckon the penalty, or the reduction in our income, could be as much as £1m".

'Not good'

Health campaigner Zuffar Haq was concerned this would lead to cuts from other departments.

He said: "It's not good for anybody... because it means the hospital has less money to spend on its facilities now.

"Patients who need to be seen, need to be seen. So they (the hospital) are in a catch 22 situation, they cannot win."

The trust said it had no definite reason for the rise but pointed to newly released census results which showed Leicester had seen an average annual 1.7% population rise during the past 10 years.

Mr Seddon said he hoped the Department of Heath was reviewing its "somewhat dated" benchmark figures.

A spokesman for the department said it had no plans to change the rules or raise the benchmark, and said PbR "promotes efficiency, supports patient choice and increasingly incentivises best practice models of care".

They added: "The intention of Payment by Results is not to penalise trusts, but to encourage the local NHS and hospitals to work together to reduce the rate of avoidable emergency hospital admissions by ensuring patients receive the best care possible in their community."